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The Regulatory Threat to Bitcoin with Jason Brett

Peter McCormack

Interview | Description | Timestamps | Show Notes

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The Regulatory Threat to Bitcoin with Jason Brett - WBD649 Peter McCormack

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Jason Brett is a former FDIC regulator who worked through the 2008 Global Financial Crisis. In this interview, we discuss the Restrict Act, a proposed piece of US legislation that could enable the Secretary of Commerce to shutter access to Bitcoin. We also talk about Operation Chokepoint 2.0, the banking crisis, and whether Bitcoin is a threat to the banks.

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Last month, a bipartisan group of United States senators introduced a bill called “Restricting the Emergence of Security Threats that Risk Information and Communications Technology Act”, which is being referred to as the RESTRICT Act. Principally aimed at mitigating foreign technology threats, the legislation would empower officials to police and restrict Americans' domestic access to a range of technologies, including Bitcoin.

Whilst not principally aimed at cryptocurrencies (it has been drafted with the aim of banning companies like TikTok from the United States), the bill has been widely criticised for its broad language. It would enable the secretary of commerce to take action against any information and communication technology connected to a foreign adversary that posed “undue or unacceptable risk”.

The US has recent experience of the original intent of laws being stretched to limit American citizens' rights: the 2001 Patriot Act has been used for increasingly pervasive monitoring and surveillance of Americans that included the implementation of bulk data collection programs by the NSA affecting millions of people.

The issue at hand is that Bitcoin presents a real and present danger to the Fed: it is both a viable alternative to commercial banks, and Treasury debt as a global reserve asset. History shows decision makers will use any tool available to restrict what they view as an undue and unacceptable risk. Whilst Bitcoin is not the primary target of the Restrict Act, it is feasible that one day it may be used to stop access to Bitcoin for Americans. Prepare accordingly.

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00:01:38: Introductions
00:01:48: Real Bedford
00:04:49: Jason's background, and the framework for the show
00:10:12: The RESTRICT Act explained
00:21:51: Understanding an act, the House and the Senate
00:29:51: The Patriot Act
00:39:54: Elizabeth Warren and her anti-crypto army
00:44:44: Over-correction causing bank failures
00:49:24: Deposit Insurance Funds, and risk vs moral hazard
01:04:12: Operation Choke Point 2.0
01:10:25: Bitcoin, not crypto
01:13:33: Bitcoin's threat to the banking system
01:24:44: Final comments

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